Analyst: Apple isn't too big to fail

Trent Nouveau, 16th March 2012

Apple is currently at the top of the tech game, with a following that other companies can only dream about.

But one analyst wonders how long it will take for Apple to be overtaken by its competitors, which he feels is an inevitable occurrence.

"What can [Cupertino] do next? Build a TV, go into game console market, manufacture electric cars?" Jon Peddie of JP Research asked rhetorically in a blog post.

"When you're sitting on the biggest pile of corporate cash in the world, and your market cap is bigger than that of most countries, your next trick had better be a bold outrageous idea or your crown will slip off faster than a starlet's garment malfunction."

According to Peddie, Apple is far from an infallible tech god and could eventually be a victim of its own success.

"Is Apple too big to fail? Not likely. One way companies maintain their growth is when they've just about wrung out all the juice that's left in their key market is to go on an acquisition binge," he explained.

"Sometimes that works, most of the time it doesn't. It kind of kept Broadcom alive, but with the possible exception of Infineon, it hasn't helped Intel much. The other choice is consolidation as Renesas and its component companies have tried, and as ST-Ericsson is trying. Neither looks too promising."

Peddie also noted that Cupertino would probably manage to pull another rabbit out of its hat in 2013, but emphasized he remained somewhat skeptical about keping the magic alive in the long-term.

"Apple has been amazingly good about keeping its plans a secret. That has worked well for the company, kept the mystery to add to its cachet, and blind-sided all the shorters who have tried to divine the company's plans.

"But what if the management at Infinite Loop are running through the halls as if their hair was on fire screaming—where's the next trick? Wow, that could be a bigger crash than 2008, and who all would they take down with them?”